Answer:
Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per unit. A large portion of the finished product is sold to Division B where it is packaged and sold overseas under a different label. The tax rate in Division B's country is higher than the U.S. tax rate. Assume the company desires to minimize the overall tax impact of the transfer (i) what type of relative pre-tax income should each division desire to achieve as a result of the transfer and (ii) what type of transfer price would accomplish your answer to (i).
Dairy Division Income Division B Income Transfer Price
.
Option "D" is the correct answer - High Low High.
Explanation:
Since in Division B, the tax rate is higher than the tax rate in US-based dairy division. Therefore to minimize the impact of the overall tax, transfer price from dairy division should be high to Division B so that the dairy division income would be higher. and the income of Division B would be lower.
Hence option "D" is the correct answer.
Answer: $245
Explanation:
If the required return on the stock is 7 percent, the current share price would be calculated as:
= 6.60/1.07 + 17.60/1.07^2 + 22.60/1.07^3 + 4.40/1.07^4 + [(4.4 × 1.0525) / (7%-5.25%)] / 1.07^4
= $245.23
= $245 approximately
Therefore, the current share price will be $245
Answer:
b. $ 264
Explanation:
Engineering
design mat. handling Setup Total
$6,000 $5,000 $3,000 $14.000
2 for X-rays 400 8 for X-rays
1 for ultrasound 600 7 for ultrasound
costs fro producing 100 ultrasound machines:
- direct materials $8,000
- direct labor $12,000
- design costs = ($6,000/3) x 1 = $2,000
- setup costs = ($3,000/15) x 7 = $1,400
- material handling costs = ($5,000/1,000 parts) x 600 = $3,000
total production costs = $26,400
production costs per unit = $26,400 / 100 units = $264
The money multiplier is 5. And the total money supply increase by $2,000 million if the Federal Reserve increases reserves by $400 million.
Given,
The Federal Reserve sets the reserve requirement at 20%.
Banks hold no excess reserves, and no additional currency is held.
- The money multiplier displays the amplitude of the change in the money supply as a result of the addition of new reserves to the banking system.
- Banks use the money they are not obligated to retain in reserve to make loans, and the borrowed money shows up on other customers' deposit accounts.
- In macroeconomics, the money multiplier is significant because it controls the money supply, which influences interest rates.
- Because it affects monetary policy and the stability of the banking industry, it is also significant in the banking industry.
The money multiplier formula can be used to calculate the total amount of new deposits or money created.
Money multiplier = 1/reserve ratio
= 1/0.20
= 5
change in Total money supply = Money multiplier × change in reserves
= 5 × $400 million
= $2,000 million
Hence, The money multiplier is 5. And the total money supply increase by $2,000 million if the Federal Reserve increases reserves by $400 million.
Learn more about Federal Reserve Bank:
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Answer:
Dr cash $660,000
Cr bonds payable $660,000
Dr interest expense $ 39,600.00
Cr interest payable $39,600.00
Explanation:
The issue of the bonds at face value implies that cash proceeds equal the face value of $660,000 which is then debited to cash account and credited to bonds payable.
The interest due on the bonds on 31st December payable on 1st January 2021 =face value*coupon rate
face value is $660,000
coupon rate is 6%
interest=$660,000*6%=$39,600.00
